§1.1 Field of the Invention
The present invention concerns advertising. In particular, the present invention concerns the way ads are to be presented to their audience and using enhanced presentation features to increase competition to produce better advertisements and markets.
§1.2 Related Art
Advertising using traditional media, such as television, radio, newspapers and magazines, is well known. Unfortunately, even when armed with demographic studies and entirely reasonable assumptions about the typical audience of various media outlets, advertisers recognize that much of their ad budget is simply wasted. Moreover, it is very difficult to identify and eliminate such waste.
Recently, advertising over more interactive media has become popular. For example, as the number of people using the Internet has exploded, advertisers have come to appreciate media and services offered over the Internet as a potentially powerful way to advertise.
Advertisers have developed several strategies in an attempt to maximize the value of such advertising. In one strategy, advertisers use popular presences or means for providing interactive media or services (referred to as “Websites” in the specification without loss of generality) as conduits to reach a large audience. Using this first approach, an advertiser may place ads on the home page of the New York Times Website, or the USA Today Website, for example. In another strategy, an advertiser may attempt to target its ads to more narrow niche audience. For example, an agency promoting tourism in the Costa Rican rainforest might place ads on the ecotourism-travel subdirectory of the Yahoo Website. An advertiser will normally determine such targeting manually.
Regardless of the strategy, Website-based ads (also referred to as “Web ads”) are often presented to their advertising audience in the form of “banner ads” —i.e., a rectangular box that includes graphic components. When a member of the advertising audience (referred to as a “viewer” or “user” in the Specification without loss of generality) selects one of these banner ads by clicking on it, embedded hypertext links typically direct the viewer to the advertiser's Website. This process, wherein the viewer selects an ad, is commonly referred to as a “click-through” (“Click-through” is intended to cover any user selection.). The ratio of the number of click-throughs to the number of impressions of the ad (i.e., the number of times an ad is displayed) is commonly referred to as the “click-through rate” of the ad. A “conversion” is said to occur when a user consummates a transaction related to a previously served ad. What constitutes a conversion may vary from case to case and can be determined in a variety of ways. For example, it may be the case that a conversion occurs when a user clicks on an ad, is referred to the advertiser's Web page, and consummates a purchase there before leaving that Web page. Alternatively, a conversion may be defined as a user being shown an ad, and making a purchase on the advertiser's Web page within a predetermined time (e.g., seven days). In yet another alternative, a conversion may be defined by an advertiser to be any measurable/observable user action such as, for example, downloading a white paper, navigating to at least a given depth of a Web site, viewing at least a certain number of Web pages of a Website, spending at least a predetermined amount of time on a Website or Web page, etc. Often, if they don't indicate a consummated purchase, such user actions may indicate a sales lead, although user actions constituting a conversion are not limited to this. Indeed, many other definitions of what constitutes a conversion are possible. The ratio of the number of conversions to the number of impressions of the ad (i.e., the number of times an ad is displayed) is commonly referred to as the conversion rate. If a conversion is defined to be able to occur within a predetermined time since the serving of an ad, one possible definition of the conversion rate might only consider ads that have been served more than the predetermined time in the past.
Despite the initial promise of Website-based advertisement, there remain several problems with existing approaches. Although advertisers are able to reach a large audience, they are frequently dissatisfied with the return on their advertisement investment.
Similarly, the hosts of Websites on which the ads are presented (referred to as “Website hosts” or “ad consumers”) have the challenge of maximizing ad revenue without impairing their users' experience. Some Website hosts have chosen to place advertising revenues over the interests of users. One such Website is “Overture.com”, which hosts a so-called “search engine” service returning advertisements masquerading as “search results” in response to user queries. The Overture.com Website permits advertisers to pay to position an ad for their Website (or a target Website) higher up on the list of purported search results. If such schemes where the advertiser only pays if a user clicks on the ad (i.e., cost-per-click) are implemented, the advertiser lacks incentive to target their ads effectively, since a poorly targeted ad will not be clicked and therefore will not require payment. Consequently, high cost-per-click ads show up near or at the top, but do not necessarily translate into real revenue for the ad publisher because viewers don't click on them. Furthermore, ads that viewers would click on are further down the list, or not on the list at all, and so relevancy of ads is compromised.
In some current auction-based online advertising systems, there can be multiple advertising positions on each Web page displayed. All ads typically have the same formatting, and are distinguished only by their position on the Web page. The positions near the top of the Web page are typically the most desirable, since ads with such placement tend to garner the attention of more end users. However, the difference in value, assumed by advertisers, between various ad positions might not be too great. Accordingly, although advertisers might prefer that their ads have a higher position, they may nonetheless be content if their ad appears in a lower position. If ad positioning is based, at least is part, on price, advertisers might be content to pay a lower price for a lower position. If placement is based, at least in part, on some performance measure of the ad, advertisers might be content if the performance of their ad isn't optimized. Thus, if advertisers don't perceive a sufficient advantage to higher placement positions, they might be content to pay less or to have ads with merely adequate performance. If the positioning is based, at least in part, on a performance parameter such as a conversion rate (e.g., a rate of consummated purchases at their Website for users that select their ad), the advertiser might not be terribly motivated to improve their Website or e-commerce user interface. If positioning is based, at least in part, on advertiser quality, the advertiser might not be terribly motivated to improve their e-commerce front end and back end, or their customer service.
As a result, end users may receive less focused and less relevant ads and possibly poorer e-commerce experiences. Moreover, advertisers may be hurt by their own complacency.
There remains, therefore, a need for more effective advertising using interactive media and services, including a need to serve ads in a manner that increases their relevance to audience members, and/or their economic value to an advertiser and/or to an ad system.